The Third Quarter (end of March) Budget report attached to this week’s Supervisors agenda finally contains one clear budget statement: “At third quarter, the Sheriff-Coroner’s Office anticipates being over budget by $1,418,762 primarily due to overtime costs associated with fires, COVID, quarantine requirements, and crime demands.” How they “anticipate” such an exact number is a matter for the prognosticators to address. The last time the Sheriff’s budget was discussed the Sheriff’s department was said to be “on budget” but that must not have included the overtime.
On the revenue side, the budget for this fiscal year (July 2021 to June 2022) is a mixed bag, but down somewhat.
Property tax revenues are projected to be about $$1.8 million over last year, from $38.5 million to $40.3 million, despite the marijuana market collapse.
Sales taxes are projected to be up by almost $200k, from about $8.3 million to about $8.5 million.
Transient Occupancy Taxes (the “Bed Tax”) (which as we have pointed out before is mostly a reflection of sales tax levels, unconnected to whatever the tourism promotion people do) are expected to be up compared to last year, going from about $7.2 million (during covid) to a projected $8 million by June 30.
As reported previously, the big drop in revenues is from lower than anticipated pot tax revenues which were almost $6.2 million in 2020/21 but are now expected to be less than $3 million, which is $3.5 million lower than budgeted (and the drop off is likely to be even bigger than that). How they were unable to anticipate this drop is also a matter for the crack fiscal prognosticators.
After discounting the $22.7 million in PG&E settlement money from last year’s total receipts, the total General Fund Revenue last year was about $85.1 million. This year the Auditor projects that the total General Fund revenue will be about $84.3 million, a reduction of about $800k. The projected $84.3 million is also about $1.2 million less than was budgeted for this year — again because of the dramatic drop in cannabis taxes.
The wild card in the County’s budget is the Biden Bailout money (American Rescue Plan Act) which we have not yet seen budgeted. Theoretically, that ARP money is for “employee payroll and benefit costs for time spent on administrative work due to covid-19 and its economic impact,” which could cover a good bit of the Sheriff’s overtime besides leaving some wiggle room for the County’s finance team. Presumably they’ve kept track of those covid admin costs (and maybe even fudged them for the County’s benefit where possible. Who knows?).
Former CEO Angelo bragged about leaving Mendocino with a $20 million reserve, mainly by maintaining a high vacancy rate in the larger departments, General Fund or not. As we’ve said before, $20 million is an overlarge reserve for an $85 million General Fund. So, even with the cannabis tax drop off, we don’t see any near-term reason to agree with Supervisor Williams’s recent assessment that Mendo has an “austere” budget, nor do we see any reason to shortchange underfunded and understaffed local ambulance services for relatively small amounts of funding help.
As usual, the quarterly budget report for the period ending March 31 does not contain a departmental breakdown, but simply says, “While the previously noted departments (Sheriff and Probation) are projecting to end the year greater than their assigned net county cost, some departments are projecting to come in under their assigned net county cost, which will offset the losses noted above and balance the budget.” Why they singled out Probation in addition to the Sheriff is not clear since elsewhere in the presentation, for example, the County Counsel’s office is overbudget by more than $100k “due to increased staffing.” (Funny, there are no vacancies in the County Counsel’s office, yet they still farm out hundreds of thousands of dollars in expensive legal work every year.)
The “assigned net county cost” is an interesting term of art that came into existence when CEO Angelo first took over in 2010. At that time she took it upon herself to decide what budgets she would “assign” to county departments based on an arbitrary percentage of projected revenue. In those days, department heads usually accepted the CEO’s number while privately grumbling about budgeting by arbitrary percentages. If you were a friend of the CEO (like the DA and former Sheriff Tom Allman) you were either given your own budget number or allowed to over-run your “assigned” budget and then have it covered by end of year adjustments in other departments and other unplanned revenues (such as late fees for late or insufficient tax payments). But if you were out of favor with the CEO, your staffing requests, for example, were denied. Supervisor McCowen once tried to have the Board be more involved in staffing decisions, but CEO Angelo staunchly refused, insisting that hiring decisions were hers alone to make to balance the budget and keep fat reserves.
There are no recommendations in the budget presentation about where the money will come from to cover the Sheriff’s overtime expenses which were previously reported by the Sheriff to be on-budget because the Sheriff, like everybody else, knew that overtime would be around $1.5 million as it has been for years.
Among the more silly cost reduction strategies under consideration by Interim CEO Darcie Antle is “ride sharing.” She told the Board a couple of weeks ago that she’s looking into ways to save travel costs by having departments ride share, especially to the Coast. We can just imagine how that will work. For example, the Ag Department’s gas pump calibration crew can share a ride with a deputy — the deputy can sit around and wait for the crew to do their work and go on to the next gas station, unless an assault or something comes in requiring the pump calibration crew to get back to Ukiah on their own. Or Child Protective Services can ride along with the road crew and be dropped off at a tweaker’s house to pick up their kid, then wait for the road crew to return from their work to bring the kid to the foster home. Or a building inspector can ride along with the health department’s restaurant checkers and sit around waiting at each restaurant or walk across the street and inspect the hand rails on a nearby building. Or a cannabis permit inspector can ride along with an Environmental Health septic tank inspector. Oh yeah, plenty of money to be saved by ride-sharing. Better yet, they could have county employees ride the MTA buses on their site visits instead of driving their brand new white (and increasingly electric) County cars and trucks.
Funny, there’s no talk of reducing any of the County’s top heavy administrative and managerial positions. For example, the Executive Office has one of the lowest vacancy rates in the county with only 1 position out of 16 vacant (and we’re pretty sure that’s a clerical position). The County Counsel’s office has no vacancies at all; maybe that’s why they’re running more than $100k over-budget. The County’s overall vacancy rate for “allocated” positions is $27%, but that percentage would be even higher if you take out the well-staffed Executive Office and County Counsel’s office.
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LAST WEEK we looked back at the minutes for the March 3 Board of Supervisors meeting which quoted the “Board Action” on the topic of an appeals process for cannabis cultivation permit denials.
“Action: Upon motion by Supervisor Haschak, seconded by Supervisor McGourty, IT IS ORDERED that the Board of Supervisors directs staff to work with the Cannabis Ad Hoc to create an appeal process for cannabis application denials, and return to the Board of Supervisors before May 3, 2022; look at options for full cost recovery; and look at options regarding the continuing of cultivation while an appeal is being processed.”
THE NEXT DAY, Thursday April 28, the Board Clerk posted the agenda for next Tuesday, May 3. So of course we immediately to looked see if the Haschak/McGourty Ad Hoc Committee and “staff” had met their self-imposed oh-so demanding two-months long deadline.
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TO ABSOLUTELY NO ONE’S SURPRISE it’s not there. No appeals process proposal. No explanation.
SO the next question is, Will anyone ask about it on Tuesday? Do these “orders” mean anything at all?
READERS who think we’re nitpicking about these things, may be right. This is indeed small potatoes and we don’t have a particular bone to pick about these long overdue permit appeals. The point is that not only do these Supervisors regularly fail on the big stuff, which we have listed several times over recent weeks, but they can’t even manage their own undemanding minor tasks.
BUT THEY’RE GOOD AT HANDING OUT large sums of money on the consent calendar whenever the CEO asks for it.
Consent Item 3t: “Approval of Agreement with AECOM Technical Services, Inc. in the Amount of $1,377,948.00 for Construction Management Services to Complete Measure B Psychiatric Health Facility at 131 Whitmore Lane in Ukiah for the Period from the Date of Execution through December 31, 2025 “
TRANSLATION: The County is farming out the planning, administration and project management of the demolition and construction of the Whitmore lane site to construct an all new Psychiatric Health Facility. AECOM will bill the county for a project director ($300 per hour), a project manager ($215 per hour), a preconstruction manager ($200 per hour), a senior construction manager ($180 per hour), a senior scheduler ($165 per hour), a senior estimator ($165 per hour) and a project coordinator ($100 per hour) and run the bill up to the amount they asked for — almost $1.4 million. (And then they’ll probably propose changes and add-ons as they go.)
IF YOU DETECT a bit of unaccountable overlap and redundancy in all this, you probably are a local contractor who naively assumes that one project manager should be able to do this. (Remember, this is not the demolition or construction contract, it’s the project management contract for those contracts. Presumably, whoever the demolition and/or construction contractor is will have their own construction manager, but in Mendo that’s not enough, not even close.)
FOR COMPARISON, one can look at the AV Schools Construction Bond project from a few years ago which was worth over $7 million and included a variety of new and remodeled construction using the full range of construction trades and taking more than a year. In that case, project manager Don Alameida did it all and did it well, including a number of re-schedulings, change orders, multiple contractors and vendors, an architect, and the school’s ill-defined original desires.
AS USUAL not only does Official Mendo not bother to explain why $1.4 million worth of top-heavy overhead is required, but they put this large contract on the consent calendar on the assumption that there’s nothing to discuss. Business as usual in Spendocino.
PS. You might recall that this is Measure B money that was voted for to improve local mental health services. Instead it’s going for a grotesquely wasteful consulting contract. Just like the Crisis Residential House, a $1 million house which ended up costing $5 million with similar wasteful overhead thrown in. And nobody in Mendo gives a damn. Not a peep out of Sheriff Allman or the legions of Mental Health Advocates about all this waste. And we haven’t even got to the project itself. Nor have we added in the cost of the overpriced architect consultant that’s designing and planning the PHF. Recall also that when the widely praised Measure B needs assessment consultant Lee Kemper delivered his report back in 2018, he estimated the cost of the PHF at $7.5 million which included a substantial “contingency.” When asked how he came up with that number Kemper said it was based on recently built PHFs in Butte County, Shasta and Tehama counties. Kemper did not include land cost nor demolition. The Whitmore Lane facility demolition will add some to the cost, as will the passage of four years since the Kemper estimate. But even if you add all that and round up to $10 million, you’re still at half the cost the County is currently estimating. That’s $10 million Measure B dollars that should go to services that are instead going to consultants.
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LOTS OF PEOPLE ASK what the County could do as a practical matter to make a dent in the Housing shortage problem. Supervisor Gjerde thinks “accessory dwelling units” would help. But when the rubber hit the road in the Coastal zone, getting permits for those “ADUs” came out to over 700 pages of “revisions.” Others say permit costs and fees should be lowered. Mendo has also developed some standardized specs for small houses which are supposedly “pre-approved.”
THERE'S MORE to a permit than the standardized specs, principally water and sewer and a host of requirements that cost money and take time. There are other ideas out there, mostly theoretical, none of which seem likely to make a noticeable difference. Supervisor Pinches proposed using non- or under-used county property to set up trailer parks like the post-fire set up at Lake Mendocino in 2017. That’s WAY beyond Mendo’s abilities.
A BIG REASON that gets overlooked a lot is the ridiculous amount of time it takes to process a permit. We know of a Boonville carpenter waiting four years for a simple one-story private home permit. If permits take too long to process, prospective buildings and contractors get discouraged and give up. Or the housing market changes, or the financing dries up, or…
THE SINGLE MOST USEFUL THING Official Mendo could do in the short-term and without difficulty is for the Planning Department to provide a monthly permit status report to the Supervisors. It would list all residential and commercial building permits with the date of application, a brief description, the zipcode/city, the fee(s) paid, and the status of the permit’s processing. We have heard that even a simple building permit can take years, but nobody’s ever even tried to keep track. In addition to shedding light on how long it’s taking to process permits, and maybe light a fire under a planning staffer, it would allow the Department, the Supervisors, and the public to see what the problems are and where and perhaps even address problems that are common to multiple applications in an area.
WILL SUCH A SIMPLE REPORT ever be produced? Will anyone even ask for one? You probably already know the answer to that.
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SUPERVISOR MULHEREN WRITES: “It seems as though the cannabis industry’s decline is hitting the wallets of local businesses. I’ve had several conversations over the last couple of days about sales being down 60-75% and folks being laid off. We knew this was coming. So again I’ll ask, what next? We should have a new development starting in Ukiah so there will be some construction jobs, the County and cities have jobs available. So frustrating that our community put so much stigma on the cannabis industry and is now looking around in surprise at our economy. What did you think was going to happen? And are you going to try and stand in the way of these housing developments? I certainly hope not. Years ago I went to a country music festival that was in the middle of someone’s big field. Maybe music festivals, airBnBs, the Great Redwood Trail and tourism are going to help? Someone said a substantial amount of cultivators came from the Bay Area and Southern California and will just go back. I’m not sure about that, I’ve been trying to brainstorm ideas in every meeting for the last couple of years but I feel like no one is engaging. So let’s hear it. Where will people work? PS. I don’t know what kind of algorithm has brought this post to people’s attention but I’m grateful for it. And again. What jobs and industries does Mendo want to have, as I’ve been asking on this page for the last three years. I would love to hear your thoughts as to what our community wants to see for industry?"
ON THE OFF CHANCE that Supervisor Mulheren is listening, we would reply that “What our community wants to see for industry” doesn’t matter because what our community wants is not related to what kinds of “industry” finds its way to Mendocino County. There’s only one “industry” in Mendocino County at the moment and that is the wine industry and its accompanying tourism, mostly confined to the Coast. Everything else of any substantial size is government, predominantly the school districts and the County itself.
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FIFTH DISTRICT SUPERVISOR CANDIDATE John Redding says the County needs an “economic development coordinator” but we haven’t heard what development he thinks needs coordinating.
OVER THE YEARS people have suggested that some kind of County revolving fund could be set up like local cities have done to help local start-ups. But no Supervisor has proposed that because they say the County’s reserves and pension fund cannot be put at risk for such loans, nevermind that the risks of the county's corporate investing are high and local start up loans would be modest and low risk if vetted and managed attentively.
AS WE HAVE SAID BEFORE, the main things the County could do to help the local economy would be to 1) make sure permits are processed expeditiously via monthly permit status reporting, and 2) take an inventory of empty buildings in the unincorporated areas and come up with plans to put them to productive use.
PS. THERE’S NO EVIDENCE that the Supervisor Mulheren’s pet project, Ukiah’s tiny piece of the Great Redwood Trail which runs from Ukiah’s “industrial” zone of miscellaneous metal buildings all the way down to the sewage treatment plant, will “help” anything economically. However, maybe if it was re-routed to run from the Railroad Depot (and site of the new County Courthouse) to the old courthouse while avoiding downtown Ukiah traffic it might mitigate the negative impact that the new courthouse will have on the economy of downtown Ukiah — impact that you’d think that a former Ukiah Councilperson and sitting Ukiah-area Supervisor would take an interest in.
BUT IT'S ENCOURAGING that the Supervisor has finally recognized that the local pot “industry” isn't working out too well, no thanks to Mendo's burdensome and costly permit program.